Montreal • Forget Newfoundland, derided for decades as the fish-dependent fiscal laughingstock of Canada. Another province is swiftly climbing the ranks of the penniless: Quebec.

Quebecers will displace their fellow countrymen as the poorest Canadians if current income and purchasing power trends continue, according to a new study released Tuesday by Montreal’s HEC business school.

The stark outlook underscores the urgency for Canada’s second-largest province to fix its structural problems and lends weight to arguments that its untapped natural resources should be developed.

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“Compared to the rest of the country, Quebec has a real revenue problem,” says Martin Coiteux, an economist who wrote the study for the HEC’s Centre for Productivity and Prosperity. Unless the province begins an honest, nothing-off-limits self-examination, “it runs the risk of finding itself last among Canadian provinces with respect to income and standard of living.”

It’s the trend lines that should be worrying Quebecers,

Mr. Coiteux said. The income gap is widening between Quebec and Canada’s richest provinces while it is shrinking with the poorest. Over a 31-year period from 1978 to 2009, every region of Canada gained on income against Quebec, according to the study. Buoyed by revenues from offshore oil, Newfoundland has bridged the income gap with Quebec to within $3,127 per adult as of 2009. Ontario’s income was $9,853 higher per adult that year while Alberta’s was $17,947 higher.

That in itself is problematic for Quebec. But the HEC research also shows that one of the key things that made living in Quebec so attractive, namely the lower cost of living compared with other big provinces, is also rapidly changing.

While it remains cheaper to buy consumer goods like food, gasoline and haircuts in Quebec than most other provinces (9% cheaper in Quebec than Alberta in 2009 for Statistics Canada’s standard Consumer Price Index basket of goods, for example), the difference is narrowing.

And that makes the purchase power equation even worse for the French-speaking province.

What explains this income nightmare? Mr. Coiteux summed it up thus: “Proportionately, fewer Quebecers work [than other Canadians]. They work fewer hours on average. And they earn an hourly pay that’s lower than that of most other Canadians.”

The relative poverty of Quebec means that its residents pay less in federal income tax and receive more transfers than those living in richer provinces, which reduces the income gap with Ontario, Alberta and B.C. But that situation also represents “a form of dependency,” Mr. Coiteux noted.

Provincial wealth in Canada is increasingly split along the lines of those who have natural resource wealth and those who do not. In addition to a bounty of hydroelectric power and aluminum production, Quebec also has known shale natural gas and oil deposits on its territory.

The Liberal government of Jean Charest has signalled it is eager to tap its forestry and mining wealth, most notably with its plan to develop a vast portion of its northern territory twice the size of Texas.

It has put oil and gas commercialization on the back burner in the face of public opposition and a continuing ocean boundary spat with Newfoundland. But even the northern development plan isn’t generating unanimity.

Quebecers have proven to be tremendously shy in using their resources to generate wealth, says Youri Chassin, economist at the Montreal Economic Institute, a conservative think-tank.

“We are kind of afraid of the consequences. And it might be good to have public debate about this. But [in that debate], we have to take into account that we are getting poorer.”

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